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Dear sir!
Please help me with the first question:
Current assets include cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash.1. 1/1 made a loan to an employee, interest 2%/year
Dr loan receivable/ Cr cash: 28.800
Dr interest receivable/Cr interest sales: 5762. Insurance from 01 September 2008 to 31 august 2009: 21.600
Dr prepayment: 14.400
Dr insurance expense: 7200
Cr cash: 216003.rent from tenant
Dr rent receivable: 9600
Cr sales: 9600I consider that the right answer is
=> current assets are adjusted : +28800-28800+576+14400-21600+9600=2976Please, explain me why I am wrong
Thanks you very much.
I assume you a referring to question 1 of the online practice tests.
The question does not ask for the total current assets – it asks what should be included in current assets for the items listed.
You cannot include cash (which you have done) because there will be lots of other cash transactions taking place and so it is impossible to calculate what the final cash balance (to be included in current assets) would be.(This is an old exam question 🙂 )
Dear Sir!
I think if the question is about receivable, it is easier to make me understand.By the way,is study text 2015 out of date?
Thank you in advance.
I am afraid that is the sort of wording that you will have to accept in the exam.
As it happened, in this question they were all either receivables or prepayments, but they could have included some related to inventory as well.
But again, you were not asked for the total figure for current assets because that would be impossible – it is impossible to know what the total cash balance is at the end of the year.No – the 2015 is not out of date because the syllabus has not changed.
If you are watching my free lectures then you don’t really need the Study Text. What you certainly must use is a Revision Kit from one of the ACCA approved publishers because practice on as many exam standard questions as possible is vital in order to be able to pass the exam.
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